State-subsidized loan schemes provide support for both retail and corporate lending during the epidemic, and the payment moratorium, in which 41 per cent of eligible corporate loans and 57 per cent of retail loans in September, continues to provide strong support for loan survival. from the survey of the Magyar Nemzeti Bank (MNB) published on Monday.
The corporate loan portfolio grew by HUF 250 billion on a transaction basis in the third quarter of 2020, and expanded by HUF 650 billion in one year, an annual increase of 7.8 percent. The payment moratorium introduced in March moderated the credit crunch by reducing repayments, while new contracts were positively impacted by central bank and government loan programs launched to mitigate the economic impact of the coronavirus.
In the third quarter, companies concluded new loan agreements worth approximately HUF 830 billion, an increase of 29 percent compared to the same quarter of 2019. According to preliminary data, the loan portfolio of micro, small and medium-sized enterprises increased by more than 10 percent between the third quarter of 2019 and 2020.
Highlight: Nhp Hajrá, with a contracted amount of over HUF 1,000 billion, significantly supported SME lending: the HUF 570 billion contract concluded under the program accounted for 69% of corporate lending in the third quarter of 2020 and the majority of new SME loan agreements. .
According to the Lending Survey, 31 percent of banks tightened corporate loan terms in the third quarter, with most banks tightening the amount of collateral required.
The MNB announced that the retail loan portfolio expanded by almost HUF 300 billion in the third quarter as a result of disbursements and repayments, slowing the annual growth rate to 15.6 per cent from 19.6 per cent in the second quarter. The expansion of the portfolio was substantially supported by the reduced repayments due to the payment moratorium. It also had a positive effect that the economic normalization following the first wave of the epidemic led to a pick-up in new lending.
In the third quarter of this year, banks concluded HUF 522 billion in credit agreements with households. This is 35 percent lower than in the third quarter of 2019, in which, in addition to the impact of the coronavirus, the base effect due to the high issuance of baby loans in the months following the launch of the program last year played a significant role. State-subsidized loan schemes also provide support to retail lending during an epidemic: baby loans account for 12% of total retail loans due to stable demand, and half of the output under the shock is made up of high-volume rural shocks.
Two-thirds of quarterly home loan agreements had a fixed interest rate for at least 10 years or until the end of the term, while the share of rated consumer-friendly home loans was 66 percent, so borrowers can count on long-term repayable installments.
According to the Lending Survey, 15 percent of banks eased their home loan terms in the third quarter of 2020, while banks have no plans to change these in the fourth quarter of this year and the first quarter of 2021. In the case of consumer loans, banks did not change credit conditions during the quarter, nor do they plan ahead due to the deteriorating economic outlook and customer creditworthiness. With the normalization of the housing market, 84 per cent of banks saw a recovery in demand for housing loans in the third quarter of 2020, and 10 per cent expect a further strengthening in the next six months.